Lucy Whittemore
SVP, UK Partnership, Cardlytics
As digital banks make switching effortless, leading financial institutions are turning to transaction-led rewards to drive retention and lifetime value.
Two decades ago, switching banks was cumbersome. Today, it’s effortless and actively encouraged. In 2024 alone, 1.19 million current accounts were switched, with nearly a million more following in just the first quarter of 2025. 1
For banks, this shift in consumer behaviour is critical. In a market forecast to reach £78.4 billion by 2030,2 the cost of acquiring new customers keeps climbing, making the defence of the existing customer base more important than ever.
Power of data-driven rewards
While 65% of customers say they would switch for better service, 78% identify personalisation as a critical factor in their decision to stay with their bank.3 This is where the traditional view of rewards needs to evolve.
Rewards are often dismissed as simple giveaways. But when powered by transaction-level data, they become a sophisticated growth tool. By connecting customers with relevant cashback offers from retail and lifestyle brands directly within their banking app, banks can turn routine interactions into lasting engagement.
In a sector facing structural change, the banks that thrive will be those that treat
rewards not as a marketing add-on, but as a core part of the value they provide
Driving tangible value
The impact of embedding smarter rewards into the banking relationship is measurable. Cardlytics data shows that this model benefits all sides: customers feel rewarded, brands gain targeted sales and banks create incremental value without relying on costly acquisition incentives.
Even a modest 5% improvement in retention can lift profits anywhere from 25%-95%.4 By focusing on loyalty, banks can generate more from the customers they already serve, improving lifetime profitability and building a stronger defence against attrition.
Scale through partnership
Banks cannot tackle this challenge alone. Building an effective rewards ecosystem requires access to a wide network of partners and the ability to process transaction-level data at scale.
This is why partnerships matter. By working with specialists like Cardlytics, banks can gain access to richer data and results already proven at scale. Across our network, we see that when cashback is targeted and embedded directly into the banking journey, engagement and discretionary spend increases – driving frequent card usage and overall higher customer value while unlocking a sustainable revenue stream.
In a sector facing structural change, the banks that thrive will be those that treat rewards not as a marketing add-on, but as a core part of the value they provide; seamlessly integrated into everyday money management.
[1] Dhanjal, O. (2025). Thousands of Brits switch to Nationwide, Co-operative Bank and Monzo – which banks are least popular? Money Week.
[2] Mordor Intelligence. (2025). United Kingdom Retail Banking Market Size & Share Analysis – Growth Trends And Forecast (2025 – 2030).
[3] Wifi Talents Team. (2025). Bank Customer Retention Statistics. Wifi Talents.
[4] Zafin. (2025). Reinventing loyalty in UK banking.
